CALIFORNIA INVENTION INDEX – MARCH 2023

The Invention Index measures a country’s or state’s innovation output by comparing GDP growth with patent production growth. 

California Invention Index March 2023: 1.84% (B grade)

California Invention Index over the last year:

Anything over C grade is positive sentiment; anything under C is negative outlook/sentiment. Using that sentiment, it is possible to observe trends over time, and also compare states/countries. In doing so we can predict which states have the best chance to recover economically from the pandemic (or any other economic incident that may occur).

Discussion:

In March, the California Invention Index scored a positive sentiment which was lower than the previous year’s average and underperformed the upward trend for the year. This is in contrast to the prior 12 months, which experienced a considerable downward trend. There has been no sudden drop in patent numbers, despite the evolving situation with Covid-19. However, it is possible that these approvals are happening on patents applied for prior to the Covid-19 outbreak. If this is the case, we may see a decrease in approvals – and a reduced Invention Index – in the coming months/years as the state feels the full economic impact of companies closing and/or being forced to minimize their staffing and therefore minimize their R&D work hours.

If the March 2023 index was higher than the 2.27% recorded in February 2025, it would suggest that California’s innovation output was stronger during that period. A higher Invention Index indicates robust patent production relative to GDP growth, which can attract investment, stimulate economic growth, and enhance the state’s reputation as a hub for innovation. This positive environment could lead to increased job creation in research and development sectors and encourage further advancements in technology and industry.​

Conversely, if the March 2023 index was lower than 2.02%, as seen in August 2024, it would imply a period of reduced innovation activity. A lower score may reflect challenges such as decreased funding for research and development, economic downturns, or other factors hindering patent production. This could result in slower economic growth, potential loss of skilled professionals to other regions, and a diminished competitive edge in key industries.​

The fluctuations in the Invention Index over these periods highlight the dynamic nature of innovation ecosystems. Various factors, including economic conditions, policy decisions, and external events like the COVID-19 pandemic, can significantly impact innovation output. Understanding these trends is crucial for policymakers and stakeholders to implement strategies that support and sustain innovation within the state.

Learn more about the Invention Index here.

Are you thinking of patenting any of your bright ideas? Did you know your research work could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? To find out more, please contact a Swanson Reed R&D Specialist today or check out our free online eligibility test.

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